Lion Real Estate Group has closed on its second fund that will be used to acquire communities across Sun Belt states. The firm closed its LREG Multifamily Fund II at more than $200 million raised. The fund saw its first closing in September 2021 but has since seen funds raised from a mix of family offices, high-net-worth investors and the firm’s capital. The firm told Multi-Housing News that the fund comprised returning investors.
The fund will be used to continue LREG’s strategy of Sun Belt acquisitions. Jeff Weller, co-founder & managing principal at LREG, said in prepared remarks that the firm has already allocated 60 percent of the fund into suitable assets. According to LREG, the properties involved in the fund so far are in Dallas and Nashville, Tenn., ranging in vintage from the 1970s to the 1980s with going-in cap rates in the mid-to-high 4 percent cap range.
LREG also told MHN that it also has two value-add deals in Atlanta that will be part of the fund. These two deals are currently in escrow and the firm plans to close on them in the coming weeks, according to LREG. Mory Barak, co-founder & managing principal at LREG, said in prepared remarks that the firm is seeing a 20 percent discount in target assets in some cases, due to the rising interest rates and inflation that we’re currently seeing.
Dallas and beyond
Prior to LREG Multifamily Fund II, the firm launched its first fund called the Marble Partners Fund I. This fund was more focused on capitalizing the general partner and raising LP capital on a deal-by-deal basis. In total, the fund acquired more than $500 million worth of real estate across 15 properties that totaled 3,503 units.
Overall, LREG has acquired more than $1.2 billion in assets stemming from 107 properties across 10 states, totaling 11,044 units since its founding in 2007. The Dallas-based firm’s current portfolio totals 6,510 units and is concentrated in the Atlanta, Austin, Texas, Dallas, Denver and Nashville, Tenn., markets. Earlier this year, LREG acquired a 172-unit community in Dallas with plans to renovate the interior and exterior.